Sen. Robert Menendez said big oil companies should 'pay their fair share.' | AP photo
Close

Menendez and Brown touted the idea of tapping into the Strategic Petroleum Reserve, while Brown also mentioned efforts to clamp down on oil market speculation and Democratic legislation allowing the Justice Department to take action against oil cartels, like OPEC, on antitrust grounds.

Republicans have emphasized expanding domestic oil and gas and other energy production. The House on Tuesday is primed to give approval to the second of three GOP bills on the calendar this month that would expedite and expand offshore oil and gas drilling.

Text Size

-

+

reset

Senate Minority Leader Mitch McConnell slammed Democrats and the White House over gasoline prices Tuesday morning, labeling them as little more than Jimmy Carter groupies.

“Democrats need to stop deflecting attention from their own complicity in our nation’s overdependence on foreign oil,” McConnell said at the Nuclear Energy Assembly conference in Washington, D.C. “They need to end an approach that hasn’t changed since the Jimmy Carter administration.

“Just like Carter, they’re more interested in using this crisis [of gas prices] as an excuse to push for higher taxes than they are at solving the problem itself,” McConnell said. “And just like Carter, they’re underestimating the frustration of the American people.”

The Democrats’ bill would repeal the Section 199 domestic manufacturing tax deduction for the companies, which Menendez said would amount to about $13 billion over a decade.

It also modifies “dual capacity” foreign tax credit rules that hit the companies for another $6.5 billion, he said.

Other tax incentives repealed in the bill include the tax deduction companies can earn on intangible drilling and development costs, including wages, fuel, repairs, hauling and supplies needed for the drilling of wells.

A deduction regarding capital investment — including the actual costs of discovering, purchasing and developing the well — is also limited, and royalty relief granted in 2005 energy legislation is repealed for some deepwater oil and gas production.

Industry officials say going after the tax incentives will be bad for jobs and the economy.

“More taxes would do nothing to lower prices," said Brian Johnson, senior tax adviser at the American Petroleum Institute. “They would, however, hurt the economy by reducing energy investment and the new jobs that would flow from that investment."

This article first appeared on POLITICO Pro at 1:05 p.m. on May 10, 2011.

Readers' Comments (72)

First thing they should do is stop the $7 billion ethanol subsidy they passed in December (signed by Obama in January), saving $70 billion over 10 years. This once-upon-a-time green technology has been so debunked that even Al Gore and Barbara Boxer no longer support it. But the Dems are still throwing $7 billion at it?

YES!!! Big oil never should have gotten these subsidies in the first place. Next it should be corporate farm subsidies ans then big pharma. Next, corporate loopholes need to be closed and all households need,if able, to pay their taxes, No more 42% paying none. Then we get to the job of cutting fefense and TSA--big time!!!

The Dems including the President are big recipients of foreign oil campaign contributions. They just oppose Domestic Oil drillers. Google (Obama Campaign Contributions Oil BP) Dems wittingly or not are in the corner of foreign import interest. Support speeding up the conversion from imported oil to Americans vast natural gas resources. Support American workers over the interests of Saudi Arabia etc.

We've got to get these Democrats out of office A.S.A.P. the Constitution means nothing to this administration. A funny but truthful video about how Obama never follows it. http://www.youtube.com/watch?v...

Notice that as usual the Republicans defend big oil and the rich. Remember that Exxon-Mobile and Chevron paid no federal income taxes last year despite record profits. Under Bush-Cheney the energy and chemical companies were coddled like the Wall St. bankers, investers, etc. Indeed, the energy and chemical companies literally wrote the nation's energy policy that gave them tax breaks and subsidies, litigation protection, reduced EPA fines for pollution imposed under the Clinton Admn. for Koch Industries (benezine), et al, dropped pollution cases or failed to pursue them, gave EPA regulation breaks to Halliburton for fracking natural gas well groundwater pollution in their cementing and oil production and stalled or underfunded SuperFund Sites, etc.

Bush-Cheney corrupted the Mineral Management Service that was supposed to provide oversight. Instead, they were literally in bed with oil producers and allowed companies to write their own inspection reports in pencil later re-copied by MMS in ink. Consequently, BP/TransOcean/ Halliburton gave America its worst environmental disaster--polluting the Gulf of Mexico, the Panhandle beaches, and destroying throusands of jobs. The pollution is still around just not readily in sight--below topsoil or sand layers, suspended, or settled on the bottom killing the base food chain.

The GOP scoff at Pres. Carter, but Carter was correct in his assessment that oil production and America's dependence on foreign oil was a danger as evidenced by the 1973 OPEC oil embargo because of America's support of Israel during their Arab war which could happen again. America should have followed Carter's recommendations of conservation, switching to alternative fuels, nuclear (Carter was a former Navy nuclear sub mariner), increased auto MPG fuel standards that remained mostly unchanged for nearly 40 years as Bush-Cheny gave out tax credits for gas guzzlers like Hummers, etc.

Had America followed Carter's advice, the subsequent Bush I and Bush II oil wars may have been avoided. Since the military-service-avoiding GOP do not really care about our servicemen just big military contracts, all those over 6,000 soldiers dead and/or wounded or the current 400,000 PTSD cases expected to go to 700,000, thousands of traumatic brain injuries, and the lifetime of VA healthcare that will triple the overall cost of the two, 18-years of combined wars may have been avoided. Remember when Cheney said the Iraq war would be relatively short and paid for with Iraqi oil?

Remember, the conservative Republican born-again deficit hawks gave us the bulk of our National Debt, which more than doubled under GW Bush, continue to push for the unfunded $4 trillion, non-jobs-creating tax cuts for the rich; tax breaks and subsidies for oil companies and big agri-business including the needless ethanol (alcohol) production that is being made from food crops like corn and use as much polluting energy to produce as they hope to save as a cleaner fuel.

For the poorly-educated, Republicans have NEVER represented the working class and that has never been more in evidence today as the GOP are blatant in thei class warfare against working class America. The GOP "cut and grow" policy is a farce as if there is any hint they are the party of jobs having posted the worst job creation record under GW Bush while losing five million manufacturering jobs. Only in America do the poor and working class fight on behalf of the rich.

Getting rid of big oil subsidies is a no brainer regardless of which US federal party you support. It is also disingenuous to say that expanded production of oil in the US would lower fuel prices. Gas prices are set by a global market, the price of oil is determined mainly by the global supply and demand and the US doesn't have enough oil it could tap anywhere near fast enough to really make a dent.

First thing they should do is stop the $7 billion ethanol subsidy they passed in December (signed by Obama in January), saving $70 billion over 10 years. This once-upon-a-time green technology has been so debunked that even Al Gore and Barbara Boxer no longer support it. But the Dems are still throwing $7 billion at it?

It's RepubliCons that fought to extend the ethanol; subsidies. Educate yourself. It was going to expire until as one of the demands of certain RepubliCons in the tax deal, especially Chuck Grassley. There was a reason it had not being extended until the last minute. Amendments to extend it or senak in other bills were blocked several times in 2010. Harry Reid(Senate Majority Leader) opposed it and with others worked to keep it out of bills earlier in the year.

If you don't like the ethanol subsidy talk to Chuck Grassley. This was his baby he pushed to get into the tax deal in December.

Chuck Grassley Comments on the subsidy:

12/9/ 2010 ---Senator Chuck Grassley (R-IA) said that he doesn't support a proposal to shift federal support for ethanol from a tax credit to building ethanol pipelines, blender pumps and more flexible fuel vehicles.

That idea was offered last week as a way to generate more support in Congress for the ethanol industry but Grassley, the top Republican on the Senate Finance Committee, said it's important for all farm and ethanol groups to stick to lobbying for maintaining a 45 cent-a-gallon tax credit for the fuel. The credit runs out at the end of the year.

Already, Grassley said, the tax credit "is once again being attacked by groups that have no viable alternative to big oil." As an example, he mentioned a press conference held Monday to call for an end to the tax credit. The opponents of the tax credit who want the credit killed are the American Meat Institute, Environmental Working Group, Grocery Manufacturers of America, Natural Resources Defense Council and Taxpayers for Common Sense.

----it didn't have the votes to pass on it's own.

Chuck Grassley Letter:

Common sense prevailed in the agreement reached last night on a tax proposal, including the fact that ethanol and biodiesel offer the most effective alternative to foreign oil and support hundreds of thousands of jobs in the United States.

The federal legislation contains an extension of the ethanol and biodiesel tax credits and an extension of the ethanol tariff at current rates. The U.S. Senate is scheduled to vote on the bill on Monday afternoon. The ethanol provision in this tax bill is an extension of current law. To leave it out of the tax bill would be a tax increase, which I don't support.

Americans spend $730 million a day on imported petroleum, and ethanol is the only renewable fuel substantially working to reduce U.S. dependence on foreign oil. Domestic ethanol displaces oil from Saudi Arabia, Venezuela and Nigeria. It now accounts for almost 10 percent of the U.S. fuel supply.

The billions of dollars we spend on imported petroleum prop up unfriendly governments and dictators. An average of $84 billion is spent each year by the U.S. military to protect oil transit routes. Until there’s another alternative fuel doing as much to reduce oil dependence, it would be foolish to undermine the only green, domestic alternative to imported oil.

I fought tooth and nail to secure the inclusion of both the ethanol and biodiesel provisions in the new legislative proposal. There were efforts by some congressional majority Democrats and the White House to weaken the tax policy for these alternative fuels. In fact, the current congressional majority allowed the blenders’ tax credit for biodiesel to expire at the end of 2009. Since then, 23,000 jobs in biodiesel have been lost nationwide. The new tax agreement would extend the biodiesel credit retroactively to cover all of 2010 and through the end of 2011.

We can’t risk a repeat performance with ethanol, where 112,000 jobs are at stake. Getting both of these tax provisions extended through the end of next year will boost jobs and investment in the alternative energy sector, exactly when the economy needs a real shot in the arm.

Wait till the oil industry wh..res (GOP) comes up with excues not to cut the oil-industry giveaways! GOP is okay as long as you starve common man. The moment, the millionaires and billionaires are asked to give up their subsidies, they get all worked up.

“Democrats need to stop deflecting attention from their own complicity in our nation’s overdependence on foreign oil,” McConnell said at the Nuclear Energy Assembly conference in Washington, D.C. “They need to end an approach that hasn’t changed since the Jimmy Carter administration.

“Just like Carter, they’re more interested in using this crisis [of gas prices] as an excuse to push for higher taxes than they are at solving the problem itself,” McConnell said. “And just like Carter, they’re underestimating the frustration of the American people.”

Really... Where are your ideas Mr. McConnell? It seems to me that at least the Democrats have tried to come up with some ideas for energy independence, all we ever seem to hear from the Republicans is drill baby drill, which as anyone with a rudimentary understanding of mathematics knows, will never be enough!

Is Mr. McConnell suggesting we just keep doing more of the same? Put the financial burden on the backs of hard working Americans so we can keep giving tens of billions of taxpayer dollars to the richest people in history?

In my opinion we need to forego political demagoguery and actually come up with a workable plan to liberate the United States from the shackles of foreign energy imports. At least from countries that don't like us, because we only have access to 3% of the worlds oil reserves and we consume 25%, so in order to free ourselves we have to have a reduction in oil consumption no matter what.

Oil shale is basically a rock that has to be fracked and mined and then have the oil extracted from it, that process burns a lot of energy and oil to accomplish, giving the process an ROEI of almost one to one; you burn a gallon of oil to get a gallon of oil, making oil shale basically useless....

Natural gas could be a good transitional fuel because we could convert gasoline burning delivery fleet trucks without too much trouble, however it will be an added expense to businesses so we'll almost certainly have to give them tax breaks, also known as subsidies.

Hybrids and electrics hold great promise for urban commuters and as more are sold and developed the price will come down and the need for tax breaks ( subsidies ) will decrease over time.

Volkswagon TDI diesel technology has consistently been way ahead of the curve compared to other fossil fuel burning vehicle efficiency. They can actually rival or exceed some hybrids!

I mention these because they all achieve the goal of lowering oil consumption.

We don't know all of the consequences from fracking for natural gas, the "Haliburton Exemption" needs to go so we know what's happening and where.

I am also very intrigued and excited by the possibility that thorium fueled nuclear reactors which produce 99% less waste than uranium, could provide safe clean power for a thousand years with the fuel available inside of the United States. Thorium was initially under consideration as a fuel source for small portable reactors in long range bombers, which raises the possibility of continuing along those lines of development as well...

In addition, thorium reactors can't melt down ( utilizing Carlos Rubbia's ADS ), the little waste they do produce has a half life of 200 years, instead of 200,000, and can actually burn our current stockpiles of nuclear waste! Harry Reid should be trying to build the first thorium reactors in Nevada, thereby killing two birds with one stone.

Hydrogen powered vehicles face many of the same obstacles as NG vehicles, but with virtually no dangerous emissions it must of necessity be considered as well.

Also I think every new residential home should have both a wind turbine and a solar array installed at the time of initial construction, which will cut the cost of installation by as much as 70%. Use the power for the hot water heater which can store electricity as latent heat energy in the water itself- if they are as inefficient as some on these threads say they are. If they are more efficient then we'll all get a bonus.

As I have said before; We need to pull together as Americans instead of being pulled apart by politicians.

Don't be simpletons people. Getting 21 billion wont be from big oil. Only in dreamland. The loss of 21 billion will be passed on to those of us filling our cars up at the gas station. More liberal examples of demonizing job creators and companies that provide a product people need and want. Sure fire way to get gas to 10 bucks a gallon is to start messing with the oil companies. Gas is high because democratic policies have destroyed the value of our dollar. Period.

In my opinion we need to forego political demagoguery and actually come up with a workable plan to liberate the United States from the shackles of foreign energy imports. At least from countries that don't like us,

We need to reduce dependence on oil period. The from countries that don't like us is political pandering by politicians. Most of US imports come from people that rdo like US

US oil imports 2010 were 4.289billion barrels....2.5billion(58%) of the 4.289billion come from Non Opec countries/ Non Persain Gulf countries. Top of the Non Opec are Canada 924million and Mexico 467million barrels

US Oil imports are down from 5 billion barrels in 2005 to 4.289billion in 2010. Opec, Non OPec and Persian Gulf imports are all down over that span.